The McDonald’s Story: How one man changed eating out in America

Monday: MicroBusiness and Marketing Marvels FROM THE DESK OF MILES EVERSON: I like starting the work week right. And for me that means sharing the stories of some of the most inspirational individuals I have either had the honor of meeting or have been influenced by myself. Which is why every Monday, I choose a “Marketing Marvel” from the business world. I hope that their life experiences and insights will also motivate you just as much as they do to me. Today, I would like to talk about one man who was credited with making a number of innovative changes in the food service model: Ray Kroc. As an American businessman, he was responsible for turning McDonald’s into the fast food enterprise it is today. Curious to know more about Kroc’s life and contributions to the industry? Keep reading to learn about the factors that made Kroc a smart businessperson and an even greater marketer of his time. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

The McDonald’s Story: How one man changed eating out in America Ray Kroc: McDonald’s CEO from 1967 to 1973 How do you create a restaurant business and become an overnight success at the age of 52? Well, as Ray Kroc said it, “I was an overnight success alright, but 30 years is a long, long night.” In 1954, Kroc, 52, was making his rounds as a Prince Castle Multi-Mixer salesman when he came across Richard and Maurice McDonald’s small hamburger shop in San Bernardino, California. The brothers’ establishment was simple and only served a few items like hamburgers, fries, soft drinks, and milkshakes. As he came into the McDonald brothers’ small business, Kroc investigated further, especially the reason why Richard and Maurice were buying a lot of mixers. As an innate businessman and being equipped with the skills of a salesman, Kroc talked the brothers out into expanding their business’ presence. He offered his services and became McDonald’s national agent, beginning a new age in franchising. That’s how the little hamburger restaurant with the bright yellow arches began. Six years later, Kroc bought the exclusive rights to the McDonald’s name and operating system for USD 2.7 million. By 1965, there were over 700 McDonald’s branches across the United States. After buying McDonald’s, Kroc built a restaurant system that became famous for providing food of consistently high quality and uniform methods of preparation. He served burgers, fries, and beverages that tasted just the same in Alaska as they did in Alabama. To achieve this, Kroc persuaded both franchisees and suppliers to buy into his vision of working not for McDonald’s but for themselves, together with McDonald’s. He promoted the slogan, “In business for yourself, but not by yourself.” This philosophy was based on the principle of a 3-legged stool: One leg was McDonald’s franchisees, the second leg was McDonald’s suppliers, and the third leg was McDonald’s employees. The stool was only as strong as the 3 legs that formed its foundation. A Uniform System Approach for All Franchises Kroc advocated adherence to McDonald’s system approach. This meant that… While many of the restaurant’s menu items such as Filet-O-Fish, Big Mac, and Egg McMuffin were created by franchisees, they are still required to follow McDonald’s core principle. What is that? The principle of quality, cleanliness, service, and value! A Passion for Quality This meant that McDonald’s ingredients were tasted, tested, and perfected to fit the operating system. As a result of this passion for quality, Kroc’s restaurant business boomed and he was able to create the most integrated, efficient, and innovative supply system in the food service industry. His relationship with suppliers also flourished over the decades. In fact, many of McDonald’s suppliers operating today started their business with a handshake from Kroc! The Hamburger University In 1961, Kroc launched a training program that was later called “The Hamburger University.” This took place at a McDonald’s restaurant in Elk Grove Village, Illinois. In this program, franchisees were trained on the proper methods for running a successful McDonald’s restaurant. The Hamburger University also used a research and development laboratory in Addison, Illinois to develop new cooking, freezing, storing, and serving methods. Today, over 275,000 franchisees, managers, and employees have graduated from the program. Ray Kroc’s Legacy Lives On Up until his last moments, Kroc never stopped working for McDonald’s. His legacy continues to this day, providing customers with great tasting, affordable food; crew and franchisees with opportunities for growth; and suppliers with a shared commitment to provide the highest quality ingredients and products. On top of all these, what made Kroc a great marketer was his dedication to serve his loyal customers. Did you know that he even wrote a letter to Walt Disney because he is looking to place a McDonald’s branch in Disneyland? The thing was, he refused to agree to a 5-cent increase on the price of fries for Disney’s profit because he didn’t want to gouge his loyal customers. As independent professionals, what can we all learn from Kroc’s experiences and insights? Nothing in the world can take the place of persistence, dedication, and attitude to achieve one’s goals. Education, talent, and skill may get you to the top, but it’s these three characteristics that will help you stay on top. Another thing we can learn from Kroc is this: See the value in people and in building good relationships with people. Don’t think of them as simply your subordinates. Treat them as partners. This will cultivate a culture of trust, which is vital to the success of your business. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Monday’s MicroBusiness Marvels! “A Diamond is Forever.” Learn more about Frances Gerety and her breakthrough ad on next week’s MicroBusiness and Marketing Marvels!